S UBJECT I NDEX
A
ABC systems. SeeActivity-based cost (ABC) systems
Accuracy, of management accounting and control systems (MACS), 342–343
Activity-based cost (ABC) systems, 172–193
bank profitability increased with, 178 committed costs in, 179–180 company example, 165–167, 178, 185,
192–193
cost of unused capacity, 179 customer profitability analysis, 221 environmental costing and, 325–326 fixed costs in, 179–181
historical origins of, 194–196 implementation issues, 189–192 possible actions, by company, 177–178 product cost and profitability,
calculating, 175–176 resource capacity cost rates,
calculating, 173
resource capacity forecasted with, 181–184
resource time usage per product, calculating, 174–175 in service companies, 187–189 theory of constraints and, 256 time-driven, 172
updating, 184–187 variable costs in, 178, 179 Activity-based pricing, 226
Act step, of plan-do-check-act cycle, 8–9 Actual capacity-related costs, 135–138 Administered transfer prices, 482, 485 Advantage, of strategy, 23–24, 27 Airlines, managing productivity in, 490 American Customer Satisfaction Index
(ACSI), 236 Applied indirect costs, 129 Appraisal costs, 269 Appropriations, 431
Assets, assigning and valuing, 486–487 Asset turnover, 488
Authoritative budgeting, 357–358 Avoidable cost, 77–78
B
Balanced Scorecard (BSC), 7 barriers to effective use of, 46–48 company example, 24, 36–42, 48–49 customer perspective, 20–21, 27–31, 219 financial control and, 463
financial perspective, 19, 20, 26–27 four perspectives of, 19–23 incentive compensation, 367–368 innovation measures on, 320–321
learning and growth perspective, 21, 35–36
managing with, 45–46 measures, 25
multiple performance measures, 353–355
for nonprofit and government organizations (NPGOs), 43–45 objectives, 24–25
process perspective, 20, 21, 31–34, 255 strategy and, 23–24
strategy map. SeeStrategy map, Balanced Scorecard targets, 25
Behavioral considerations in budgeting, 398
with management accounting and control systems (MACS), 343–344
Behavioral issues, in budgeting, 357–360 Benchmarking, 275–280
company example, 279 cooperative, 278 database, 278
development of long-term
commitment to project stage, 277–278
functional (process), 278 group, 278–279
identification of benchmarking partners stage, 277 indirect/third-party, 278
information gathering and sharing methods stage, 278–279 internal study and preliminary
competitive analysis stage, 276 product, 278
stages of, 276
taking action to meet or exceed benchmark stage, 279–280 unilateral (covert), 278
Benchmarking (performance) gap, 279 Breakeven point, 71
Break-even sales, 68, 69 Breakeven time (BET), 316–319 BSC (Balanced Scorecard). SeeBalanced
Scorecard (BSC) Budgeting process
ABC model and, 394–395 capacity levels, choosing, 406–408 cash flow statement, 409–413 company example, 400–402 demand forecast, 403 designing, 357–358 discretionary costs and, 395 financial plan, 409 illustration of, 400–414 influencing the, 359–360 managing, 434–435 production plan, 403–404
production plan, interpreting, 408–409
projected results, using, 414 spending plans, development
of, 405–406 Budgets/budgeting, 395
authoritative, 357–358
behavioral considerations in, 398 behavioral issues in, 357–360 California budget crisis, 393–394,
435–436
cash inflows section, 409, 411 components of, 398–399 consultative, 358–359 continuous budget cycle, 432 cost information used for, 63–64 criticisms of traditional model,
434–435
discretionary expenditures, controlling, 432–434 elements of, 397–398 financial, 400
financing section, 412–413 first-level variances, 420 flexible, 420–421
flexible budget variances, 421–422 incremental, 432
incremental budgeting, 432 master, 419–420
operating, 400 participative, 358 periodic budget cycle, 432 quantity and price variances for
material and labor, 422–428 role of, 395–397
sales price variance, 430 sales variances, 428–429 sales volume effects, 429–430 second-level variances, 422 sensitivity analysis, 415–416 in service and not-for-profit
organizations, 431 strategic planning with, 7 support activity cost variances,
427–428
variance analysis, 417–418 what-if-analysis, 415–416 zero-based, 433
Bundle approach, 71
C
California, state budget of, 393–394, 435–436
Capacity cost rate, 172–173 in service companies, 188 updating time-driven, 184–187 Capacity-related costs, 66
plannedvs.actual, 134–135 reconciling actual and applied,
135–138
Capacity-related resources, 125
Capacity resources, budgeting and, 406–408
Capital spending plan, 399, 400, 405–406 Cash bonus plans, 366–367
Cash flow statement, 409–413 Cash inflows, 409, 411–412 Cash outflows, 41, 409 CDs (compact discs), 258–259 Cellular manufacturing (group
technology), 259 Certified supplier, 269
Check step (of plan-do-change-act cycle), 8
Chief executive officers (CEOs), cheating by, 347 Chromium, 328
Compact discs (CDs), 258–259 Compensation, incentive. SeeReward
and incentive programs Complete customer solutions, 30 Concorde effect, 75
Concorde fallacy, 75
Consistency, in management accounting and control systems
(MACS), 343
Consultancies, labor productivity in, 489 Consultative budgeting, 358–359 Consumable resources, 125 Continuous budget cycle, 432
Contracting, cost information used for, 64 Contracting out, 79
Contribution margin, 67 Contribution margin per unit, 67 Contribution margin ratio, 67 Controllability principle, 474–475 Conversion costs, 141
Cooperative benchmarking, 278 Cost(s).See alsoLife-cycle costing
applied indirect, 129 appraisal, 269 avoidable, 77–78 capacity-related, 66 context of classifying, 127 direct, 125–126, 127 direct labor, 79 direct material, 79
dropping a product and, 82–85 explicit, 326
fixed, 66 implicit, 326 incremental, 73–74 indirect, 126–127, 128–134 make-or-buy decisions and, 78–79 manufacturing, 79–81
manufacturing overhead, 79 marketing, selling, distribution, and
administrative (MSDA), 219–220 mixed, 71
opportunity, 76–77
for orders, estimating, 85–87 of quality control, 269–270 reimbursement, 64 relevant, 76, 87–93 step variable, 73 sunken, 74–75
variable, 64–65, 128–129 Cost analysis, 309–312
Cost-based transfer prices, 482, 483–485 Cost centers, 470–471, 473
Cost driver level, 136 Cost driver rate, 129 Cost drivers, 64
actual costs and, 136–137
cost pools having different, 132–134 planned cost and planned level of, 137 Cost flows
in manufacturing organizations, 123–124
in retail organizations, 124 in service organizations, 124–125 Cost information
budgeting and, 63–64
performance evaluations and, 64 pricing decisions and, 63 product planning and, 63 reimbursement contracts and, 64 Costing orders, 85–87
Costing systems
activity-based.SeeActivity-based cost (ABC) systems
allocating service department costs, 146–150
classification of costs, 127
company example, 121–122, 144–145 cost pool homogeneity, 132–134 job order costing, 138–139 kaizen, 273–275
multiple indirect cost pools, 130–132 process costing, 139–144
product, 167–168 terminology, 125–127 total-life-cycle, 302–304
traditional manufacturing, 167–171 Cost management systems, 123. See also
Management accounting and control systems (MACS) cost flows in organizations, 123–125 reconciling actual and applied
capacity costs, 135–138 Cost object, 125
Cost of nonconformance (CONC) to quality standards, 268–270 Cost-of-quality (COQ) report, 269–270 Cost of unused capacity, 179, 180–181, 184 Cost pools, 128
with different cost drivers, 132–134 multiple indirect, 130–132 single indirect, 135
Cost-volume-profit (CVP) analysis, 7, 66–72
assumptions underlying, 72 equation, developing and using,
67–69
for multiproduct firms, 70–71 share price and, 70
what-if-analysis, 69–70
Cross-functional product teams, 308 Customer acquisition, 32
Customer growth, 32
Customer lifetime value (CLV), 233–234 Customer loyalty, 236–238
Customer management processes, 32 Customer perspective, of Balanced
Scorecard, 19, 20–21, 26, 27–31, 37–39
Customer profitability, 220–232 increasing, 226–232
life-cycle, 233–235
managing customer relationships and, 226–227
measuring, 220–225
pricing waterfall and, 227–232 process improvements and, 226 reporting and displaying, 222–223 salesperson incentives and, 232–233 service companies and, 224–225 whale curve of, 222–224
Customer relationship management (CRM) software systems, 232 Customer satisfaction, 235
customer loyalty and, 236–238 measured with nonfinancial
measures, 235–239
net promoter score (NPS) and, 238–239 nonfinancial customer metrics, 219–220 surveys, measuring with, 235–236 Customer satisfaction and retention, 32 Customers, unprofitable, 218–219 Customer value propositions,
29–31, 30
Cycle time, 255, 256, 261, 263, 264
D
Database benchmarking, 278 Data falsification, 354 Death spiral, 137 Decentralization, 464–466 Demand forecast, 403
Deming cycle (plan-do-check-act cycle), 5–9
Diagnosis-related groups (DRGs), 452–453
Diagnostic control systems, 350 Direct costs, 125–126, 127 Direct labor costs, 79, 419
Direct labor cost variances, 425–426 Direct material costs, 79
Direct materials costs, 419 Direct method of allocating service
department costs, 161 Discretionary expenditures, controlling,
432–434
Domestic Auto Parts (DAP), 58–61 Domestic transfer pricing, 481 Do step, of plan-do-change-act cycle, 7 Dysfunctional behavior, 353–354
E
Earned value management systems (EVMS), 135
Earnings management, 354
Economic value added (EVA), 491–492 Education, empowering employees and,
356–357
Efficiency (quantity) variances, 422 80/20 rule, 222–223
Electronic performance monitoring systems, 351
Employees
dysfunctional behavior by, 353–354 empowering, to be involved in MACS
design, 355–357 ethics and. SeeEthics
Employees (continued) incentive systems rewarding
performance of. SeeReward and incentive programs monitoring, 351–352
resistance to change, 355 responsibility of, and incentive
compensations, 364 Employee self-control, 350
Empowerment, of employees in MACS design, 355–357
Engineered costs, zero-based budgeting and, 433
Enterprise resource planning (ERP) systems, 468
Environmental costing, 324–328 Environmental, health and safety (EHS)
performance, 40 Equivalent unit of production, 141 Ethical control system, 349 Ethics, 345–353
avoiding dilemmas in, 345–346 cheating by CEOs and, 347 conflicts between individuals and
organizational values, 346, 348
conflicts between organization’s stated and practical values, 348 dealing with conflicts in, 346, 348 manager’s role in, 345
steps in decision-making, 349, 350 Excel, 96
Explicit, 326
External failure costs, 269–270 Extrinsic rewards, 361. See alsoReward
and incentive programs
F
Facility layout systems, 255–259 costs and benefits of changing to a
new, 261–268 group technology, 259
process layout, 256–257, 258–259 product layout, 257, 259
theory of constraints and, 255–256 Feasible production set, 91
Feasible set, 91, 92
Financial accounting, management accountingvs.,2–3
Financial Accounting Standards Board (FASB), 3
Financial budgets, 398, 400 Financial control, 18
assessing productivity using, 489 company example, 462–463, 494–496 cost allocations to support, 478, 480 decentralization and, 464–466 defined, 463
efficacy of, 493–494 environment of, 463–464 financial pricing, 481–486 income statements, 479, 480–481 internal, 464
residual income, 490–492 responsibility centers. See
Responsibility centers return on investments, 487–490
segment margin report, 475–478 transfer pricing, 481–486 Financial information, 2
Financial perspective, of Balanced Scorecard, 19, 20, 21, 26–27, 36–37
Financial perspective, performance management and, 18 Finished goods inventory, 123 First-level variances, 420 Fixed costs, 66
in activity-based cost system, 179–181 Fixed manufacturing overhead, 128 Flat organizations, 354
Flexibility, in management accounting and control systems (MACS), 343 Flexible budget, 420–421
Flexible budget variances, 421–422 Flexible resources, 125
Floor price, 85
Flow-shop layout (product layout), 257–259
Functional (process) benchmarking, 278 Functional layout (process layout),
256–257
G
Gain sharing, 368–370
Gaming the performance indicator, 353–354
Goal congruence, 350
Graphs, solving linear programs on, 91–92 Group benchmarking, 278–279
Group technology, 259, 260–261
H
Hawthorne Plant, Western Electric Company, 9
Hospitals, lean manufacturing used in, 272–273
Human relations movement, 344 Human resources model of motivation
(HRMM), 344
I
Implicit costs, 326
Improshare (improved productivity sharing), 369
Incremental budgeting, 432 Incremental costs, 73–74 Indirect cost pool
with different cost drivers, 132–134 multiple, 130–132
Indirect cost rate, 129
Indirect costs, 126–127, 128–134 Indirect expenses, 168, 169, 171, 173 Indirect labor expense, 173 Indirect labor time, 174–175 Indirect materials, 128
Indirect/third-party benchmarking, 278 Innovation processes, 33, 34
Interactive control systems, 350
Internal failure costs, 269 Internal financial control, 464 International Accounting Standards
Board (IASB), 3 International Organization for
Standardization (ISO), 268 International transfer pricing, 481, 482 Intrinsic rewards, 360–361
Inventory costs, 259–260 Inventory policy, 404 Investment centers, 472, 473
assigning and valuing assets in, 486–487
Investments, in theory of constraints (TOC), 256
Investments, return on, 487–490 ISO 9000 series of standards, 268
J
Japan, 304–305
Job order costing, 123, 138–139 Job shop (process layout), 256–257 Just-in-time (JIT) manufacturing, 263,
270–272
company example, 254–255, 280–284
K
Kaizen costing, 273–275 Key performance indicator (KPI)
scorecards, 46
L
Labor costs, 88
Labor cost variances, 424–425 Labor productivity, 489
Lean manufacturing, 267–268, 272–273 Learning and growth perspective, of
Balanced Scorecard, 20, 21, 26, 35–36, 40–42
Least cost materials mix, 90 Life-cycle costing
breakeven time (BET), 316–319 company example, 301 environmental costing, 324–328,
325–326
target costing. SeeTarget costing total-life-cycle costing (TLCC), 302–303 Life-cycle revenues, 321–324
Linear programming, 89–92 Lowest total cost, 29 Loyalty, customer, 236–238
M
Machinery expenses, 173 Machinery time, 175
MACS.SeeManagement accounting and control systems (MACS) Make-or-buy decision, 78–79 Management
with the Balanced Scorecard, 45–46 ethics and, 345
Management accounting defined, 2
financial accounting vs.,2–3 history of, 3–4
supporting internal decision making, 63–64
used for strategic planning, 4–5 Management accounting and control
systems (MACS) Balanced Scorecard approach,
353–355
behavioral issues in budgeting and, 357–360
change management, 355 characteristics of well-designed,
342–344
company example, 341, 383–392
”control” in, 342 defined, 342
employee involvement, in design of, 355–357
ethical code of conduct and.
SeeEthics
extrinsic rewards, 361–362
human resource management model of motivation, 344
incentive systems. SeeReward and incentive programs intrinsic rewards, 360–361 motivating appropriate behavior,
349–350
performance measures, 353–355 results control, 352–353 task control, 351–352
Management accounting information behavioral implications of, 9 plan-do-check-act (PDCA) cycle
and, 5–9
Managing customer relationships, 226–227
Managing relationships, 226–227 Manufacturing costs, in total-life-cycle
costing, 79–81 Manufacturing environment
cost flows in, 123–124 indirect costs in, 128–134
Manufacturing overhead costs, 79, 80 Manufacturing stage, 303–304 Market-based transfer prices, 482,
483, 485
Marketing, selling, distribution, and administrative (MSDA) expenses, 219–221 Market research, 320 Master budget, 419–420
Material quantity variance, 422–423 Measures, Balanced Scorecard
customer outcome, 28, 30–31 defined, 25
financial, 28 process, 34 Mercedes, 29 Microsoft Excel, 91 Mission statement, of FedEx
Corporation, 6 Mixed costs, 72
Monitoring, in the workplace, 351–352
Motion pictures, 321–324
Motivation.See alsoReward and incentive programs
human resource management model of, 344
organization of employees and, 349–350
Movies, 321–324
Multiple indirect cost pools, 130–132 Multiple resource constraints, 89–90 Multiproduct companies, 487, 500
N
National Mint, the, 140–141 Negotiated transfer prices, 482, 485 Net promoter score (NPS), 238–239 New products and services, planning
for development of, 7 Nonfinancial information, 8
Nonfinancial measures of innovation, 320 Nonfinancial measures, performance
management and, 18 in Balanced Scorecard (BSC), 20 Nonfinancial metrics, customer
relationships and, 235–239 Non-goal congruent behavior, 353 Nonprofit and government organizations
(NPGOs), Balanced Scorecard applied to, 43–45
Not-for-profit organizations, budgeting in, 431
NPS (net promoter score), 238–239
O
Objectives
of Balanced Scorecard (BSC), 24–25 customer outcome, 28, 30–31 financial, 28
learning and growth, 35–36 process, 31–34
sample, 21, 22 typical, 24–25 Open Office Calc, 91 Operating budgets, 398, 400
Operating costs, in theory of constraints (TOC), 256
Operating income statement, 230–231 Operational processes, 34
Operations management processes, 32 Opportunity cost, 76–77
Outsourcing, make-or-buy decision and, 78–79
P
Participative budgeting, 358
Pay-for-performance systems, 362. See also Reward and incentive programs Performance evaluation, cost
information used for, 64 Performance measurement systems. See
alsoBalanced Scorecard (BSC) financial measures, insufficiency of, 18 frameworks for, 18–19
rewards systems and, 362–363
roles of, 18
used to influence versusevaluate decisions, 475
Periodic budget cycle, 432
Plan-do-check-act (PDCA) cycle, 5–9 Planned capacity-related costs,
134–135, 135–138 Planning step, of plan-do-check-act
cycle, 6–7 Planning variance, 421
Postsale service and disposal stage, in total-life-cycle costing, 304–305 Practical capacity, 129, 186
estimating, 138
Predetermined indirect cost rate, 129–130
Predetermined overhead rate, 129 Predetermined plantwide indirect cost
rate, 130 Prevention costs, 269 Preventive control, 351
Price (rate) variances, 422, 423–424 Pricing, activity-based, 226 Pricing decisions, cost information
used for, 63 Pricing waterfall, 227–232 Process costing, 123, 139–144 Processing cycle efficiency
(PCE), 261 Processing time, 261
Process layout, 256–257, 258–259 Process perspective
Balanced Scorecard and, 255 benchmarking, 275–280
cost of nonconformance (CONC) to quality standards, 268 facility layout systems, 255–259 inventory costs/processing time,
259–268
just-in-time manufacturing, 270–272, 280–284
kaizen costing, 273–275 lean manufacturing, 267–268 quality control costs, 269–270 Process perspective, of Balanced
Scorecard, 20, 21, 26, 31–34, 39–40
Product benchmarking, 278 Product costing systems, 167–168 Product, decision to drop a, 82–85 Product design and development.
SeeLife-cycle costing Product innovation and leadership,
29–30 Productivity
assessing, 489
labor, in a consultancy, 489 managing, in airlines, 490 Productivity improvements, 26–27 Productivity, measure of, 488–489 Product layouts, 257, 259
Product planning, cost information used for, 63
Profitability, customer. SeeCustomer profitability
Profit centers, 472, 473 Profit sharing, 367–368
Pro forma financial statements, 399 Project funding, 433–434
Q
Quality costs, 269
Quality function deployment (QFD) matrix, 311
Quality standards, 268
Quantity (efficiency) variances, 422
R
Rate (price) variances, 422, 423–424 Ratio of assets to equity, 488
Ratio of operating income to sales, 488 Ratio of sales to assets, 488
Ratio of sales to investment, 488 Raw material productivity, 489 Reciprocal method of allocating service
department costs, 149–150 Regulatory/social processes, 33–34 Reimbursement costs, 64
Relative cost method, 486 Relevant cost, 76, 87–93 Relevant cost analysis, 7, 88 Remediation, 325
Reorganization, of plant layout, 261–263 Report, cost of quality, 269–270 Research, development, and engineering
(RD&E) stage, in total-life-cycle costing, 302–303, 321
Research in Motion (RIM), 1–2 Residual income, 490–492 Responsibility centers
coordinating, 466–467 cost centers, 470–471, 473 defined, 467
evaluating, 474–475 income statements, 478–480 investment centers, 472, 473 investment centers, assigning and
valuing assets in, 486–487 profit centers, 472, 473
revenue centers, 471, 473 types of, 470–473 Results control, 352–353 Retail organizations, cost flows
in, 124
Return on capital employed (ROCE), 36–37
Return on investments, 487–490 Return on sales, 488
Revenue centers, 471, 473 Revenue growth, 26, 27
Reward and incentive programs, 45, 362
based on outcomes, 364–365 cash bonus plans, 366–367 company example, 367–368 conditions favoring, 364 employee responsibility and, 364 extrinsic rewards, 361–362 gain sharing, 368–370 Improshare, 369
intrinsic rewards, 360–361 managing, 365–366
pay-for-performance systems, 362 performance measurement
and, 362–363 profit sharing, 367–368
Rucker plan, 369 Scanlon plan, 369 stock-related, 370–371 types of plans, 366
RIM (Research in Motion), 1–2 Rucker plan, 369
S
Sales margin, 488 Sales mix variance, 429 Salesperson incentives, 232–233 Sales price variance, 430 Sales quantity variance, 429–430 Sales variances, 428–429 Sales volume effects, 429–430 Scanlon plan, 369
Scientific management school, 344 Scope, of strategy, 23–24, 27 Scorecards. SeeBalanced Scorecard
(BSC); Key performance indicator (KPI) scorecards Second-level variances, 422 Segment margin report, 476–478 Sensitivity analysis, 415–416 Sequential method of allocating
service department costs, 147–149
Service departments, allocating costs of, 146–150 direct method, 147 reciprocal method, 149–150 step-down method, 147–149 Service organizations
activity-based cost costing in, 187–189
cost flows in, 124–125 customer costs in, 224–225 role of budgeting in, 431 Service quality indicator (SQI), 469 Share of wallet, 237
Six Sigma system (Motorola), 268 Smoothing, 354
Solver,91
SQI (service quality indicator), 469 Step-down method of allocating service
department costs, 147–149 Step variable costs, 73
Stock-related compensation plans, 370–371
Strategy
advantage and scope of, 23–24 management accounting and, 4–5 plan-do-check-act cycle, 5–9 two principal functions of, 23 Strategy map, Balanced Scorecard,
7, 25–26
company example, 36–42 customer perspective, 27–31 financial perspective, 26–27 learning and growth perspective,
35–36
process perspective, 31–34 Sunk cost phenomenon, 75 Sunk costs, 74–75
Supply chain management, 308 Support activity cost variances,
427–428
Survey(s)
customer satisfaction, 235–236 determining importance of customer’s
requirements with, 310–311
T
Take-back and recycle program (Cisco), 328
Tall organizations, 354 Target cost, 307 Target costing, 63
company examples, 308–314, 315, 335–339
concerns about, 314–316 cost analysis, 309–312 cross-functional teams, 308 supply chain management, 308 traditional costing methods vs.,
305–308
value engineering process, 307–308, 312–314 Target reduction rate, 273 Targets, Balanced Scorecard, 25 Task control, 351–352
Taxes, in budgets, 409
Teach for America (TFA), 44–45 Technical considerations, with
management accounting and control systems (MACS), 342–343
Theory of constraints (TOC), 255–256 Third-level variances, 422
Throughput contribution, 256 Time-driven activity-based costing
(TDABC), 172, 184–187 Time equations, 186–187, 189 Total-life-cycle costing (TLCC)
manufacturing stage, 303–304 postsale service and disposal stage,
304–305
research, development, and engineering stage, 302–303 Trade loading, 491–492
Trade Research Institute, 482 Transfer pricing, 481–486
administered approach to, 485 based on equity decisions, 485–486 cost-based approach, 483–485 domestic, 481
four main approaches to, 482 international, 481, 482 market-based approach, 483 negotiated approach to, 485 Turnover, 488
U
Unilateral (covert) benchmarking, 278 Unprofitable customers, 218–219
V
Value engineering process, 307–308, 312–314
Value index, 313
Value propositions, 26, 29–31 Variable costs, 64–65, 125, 187, 483 Variable overhead costs, 128–129 Variance, 417
Variance analysis, 417–418 Variances
direct labor cost, 425–426 efficiency (quantity), 422 first-level, 420
flexible budget, 421–422 planning, 421
price (rate), 422, 423–424 sales price, 430
sales quantity, 429–430 second-level, 422
support activity cost, 427–428 third-level, 422
W
Whale curve, 222–224
What-if-analysis, 69–70, 415–416 Whistle-blowing, 348
Work-in-process inventory, 123, 136
Y
Yield (raw material productivity), 489
Z
Zero-based budgeting, 433